Border cities usually lag behind in terms of economic development and they deal with issues that are not very salient in other parts of the country. However, what we found is that even if there is a starking difference of development across different parts -and sides- of the border (you can read Daron Acemoglu and James Robinson’s “Why Nations Fail?” for more about this differential in terms of economic development across the Mexico-U.S. border), it is also the interaction between the two sides of the border that strengthens them. Development, which is my main research interest, is positively impacted by trade between the U.S. and Mexico, as complementary clusters have developed in both sides.

Of course, there are many other factors that contribute to the economic development of a region, but what we found in this study is that economic development and welfare across border cities in the U.S. and Mexico seem to be boosted by trade, whenever we construct complementarities across sides.